Carmakers: Let’s make deal on fuel economy

John Lippert and Ryan Beene
Bloomberg News

The automaker trade group that urged President Donald Trump to review tougher U.S. fuel economy rules now says the industry, federal government and state of California should all want to do a deal to increase standards because of public support.

Reaching an accord will entail compromise on how much the companies should need to increase fuel efficiency over time, Mitch Bainwol, president of the Alliance of Automobile Manufacturers, said. The group, whose members include General Motors Co., Volkswagen AG and Toyota Motor Corp., is calling for a three-way pact with the Trump administration and California, which has the toughest clean-air rules in the country.

“There is a profound consensus perspective on fuel economy and greenhouse gases,” Bainwol wrote in a slideshow presented Tuesday at the Center for Automotive Research Management Briefing Seminars in Traverse City. “The only issue is the degree of the slope.”

The remarks cast a positive light on the prospects for agreement between regulators who’ve been in conflict over the future of the auto industry environmental rules. Trump ignited debate in March when his administration reinstated a review of national greenhouse-gas rules that run through 2025, which he said “would have destroyed” the auto industry. California Governor Jerry Brown and the state’s Air Resources Board, meanwhile, have vowed to remain a bulwark against the president’s push for environmental deregulation.

The auto industry wants a deal with Trump and California in part because it sees an opportunity for rules to be harmonized and made more rational, Bainwol wrote. He discouraged the U.S. and the state from resorting to costly and protracted litigation and said California’s willingness to be flexible on rules leading up to 2025 could lead to an accord with the industry on standards in later years.

The Alliance commissioned a poll last month that found almost two thirds of consumers agreed the government should increase the standards. The poll, conducted by Morning Consult, found support among 69 percent of Democratic respondents and 63 percent of Republicans.

“When you cut through all of the political hyperbole, there will be a common interest in getting to yes,” Bainwol said in the interview with Bloomberg News.

While Americans want higher standards, they also may not be willing to pay a premium for more efficient autos, the poll found. Almost one fourth of respondents said they were willing to pay nothing, while one fifth said they were amenable to the cost being less than $1,000.

Six years ago, automakers agreed with regulators in the U.S. and California to limit carbon dioxide and other pollutants by boosting fuel economy to an average of more than 50 miles per gallon by 2025.

Last week, the National Highway Traffic Safety Administration said it may revise fuel economy standards on the books for model year 2021 and possibly keep those standards flat through 2025, instead of rising every year.

In March, a White House official speaking on the condition of anonymity said the administration would seek to convene three-way talks along the lines that Bainwol advocated for Tuesday.

Annette Hebert, chief of emissions compliance at the California Air Resources Board, said the Trump administration hasn’t contacted the state regulator. She said she sees no reason for California to lower its 2025 emissions target.